City AM | 14 June 2019

The next door neighbour effect is over

Looking back to four or five years ago when Prime Central London property prices were booming, it became commonplace to buy in a neighbouring borough if out-priced more centrally.

Buyers who could no longer afford Belgravia looked next door in Chelsea, and those searching for property in Chelsea moved into neighbouring Fulham instead.

However, with prices taking a dip, we are noticing that the ‘next door neighbour effect’ is starting to reverse somewhat.

Areas within Prime Central London are becoming attainable once again and the British property investors are back.

Middle Eastern and Russian buyers, so prevalent in Prime Central London some three or four years ago when the market was soaring, are now being matched by UK buyers returning to areas of London where they may have been previously out-priced.

These British buyers are more often permanent residents, using their properties as London boltholes or full-time homes, and the life and soul is once again returning to these prestigious boroughs.

Here are the Prime London boroughs back in favour

Belgravia

The beauty of Belgravia is its central location, within walking distance to Sloane Square, Knightsbridge, Marylebone and Fitzrovia.

It boasts some lovely little pockets of neighbourhoods such as Eton Square and Chester Square, along with new, trendy areas popping up such as Eccleston Yards.

A favourite street among the team at INHOUS is Kinnerton Mews Road, a hidden street that no-one really knows about yet just short stroll to Knightsbridge.

Belgravia remains popular with international investors, but wealthy British buyers are now starting to return to the area seeking properties as their central London bolthole.

Chelsea

If Belgravia is the elegant, slightly more mature relative, Chelsea offers a younger vibe and remains hugely popular with European and UK buyers.
The children of wealthy families living in Belgravia frequently opt to buy in neighbouring Chelsea which is a bit more affordable.

Centrally located, close to the river and with excellent schools, Chelsea has enduring appeal and with new developments around Chelsea Barracks and nearby Battersea Power Station it looks set to remain top of the list for many affluent London property buyers.

Notting Hill

Notting Hill is an eclectic but equally high-end neighbourhood. Notting Hill properties are generally very large, there is excellent schooling nearby and the area offers a more artsy, alternative atmosphere. Residents are generally young money and young professionals and it’s especially popular among French buyers.

A great commuter district with superb connections into central London and to Heathrow Airport, it’s a great option for those who travel a lot for work or pleasure.

When to buy?

Investors looking to purchase in these popular Prime Central London neighbourhoods should take advantage of the current sluggish property prices before they bounce back.

Savills predicts that house prices in Prime Central London will climb 6% in 2021, with a 12.4% overall rise in prices between 2019 and 2023.

With Brexit due at the end of October 2019 and market optimism rising, there could be a limited window of opportunity to snap up property in these desirable areas before prices escalate.

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FEES FOR TENANTS

Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department.

Permitted Charges in accordance with the Tenant Fee Act 2019

The following payments may apply when entering an Assured Shorthold Tenancy:

First month’s rent In advance
Tenancy Deposit 5 weeks, or 6 weeks if annual rent is over £50,000
Holding Deposit One week’s rent, put towards your first rent due
Early termination when requested by the tenant A charge not exceeding the financial loss experienced by the landlord
Default charge for late payment of rent A maximum of 3% above Bank of England base rate, charged when rent is more than 14 days late
Default charge for replacement of lost key or security device Equivalent to cost incurred
Changing the tenancy documents after the commencement of the tenancy, including change of sharer £50 incl. VAT

The following payments may apply when entering a Non-Housing Act Tenancy:

A Non-Housing Act Tenancy is formed when the annual rent exceeds £100,000 or the property is occupied by a Company rather that an individual.

  Inclusive of VAT
Tenancy Setup Fee drafting and execution of tenancy agreement if supplied by us, collecting and holding the Security Deposit as Stakeholder, issuing protection certificates, if applicable, Open Banking type referencing of tenant and initial Right to Rent Checks £360
Check-in Fee checking into the property and reviewing inventory minimum of £130
Tenancy Continuation negotiating and drafting an extension £150
Change of Sharer – Deed of Assignment £120
Early Termination – Deed of Surrender £120
Guarantor Referencing Fee (each): £30
Deed of Guarantee Fee: £50
Late payment of rent 3% above the Bank of England base rate

 

How to Rent Guides:

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How to rent – GOV.UK (www.gov.uk)

FEES FOR LANDLORDS

Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department for a full breakdown of costs. Here’s a list of what you can typically expect to pay:

Lettings Service Only: 10%+VAT (12% inc. VAT) – Including rent collection
Letting and Management Service: 16%+VAT (19.2% inc. VAT)
Short Let (less than 6 months): 24%+VAT (28.8% inc. VAT)
Lettings Renewals Service: 8%+VAT (9.6% inc. VAT)
Lettings and Management Renewal: 14%+VAT (16.8% inc. VAT)
Short Let Renewal (less than 6 months): 24%+VAT (28.8% inc. VAT)

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Additional non-optional fees and charges

We will not be charging clients fees for referencing, tenancy agreements or deposit registration.

The costs of a clean, EPC, gas safety, EICR, PAT and inventory are set by third party suppliers and prices may vary. The below schedule is to give you an idea of what you would typically pay.

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We are also a member of a redress scheme provided by The Property Ombudsman www.tpos.co.uk.